Advance Delivery Charges on COD Orders in Pakistan: When to Ask, How to Ask, and a Rs Calculation to See If It Pays

What advance delivery charges on COD orders mean

Advance delivery charges on COD orders means the buyer sends a small part of the bill before you dispatch, usually the delivery fee of Rs 200 to Rs 300, and pays the rest in cash to the rider. Many Pakistani sellers have started asking for it after a bad month of returns, and many buyers now see the line "delivery charges advance" on Instagram and WhatsApp stores.

It sounds like an easy fix: a buyer who has paid something is less likely to refuse the parcel. But it has a real cost too. Some buyers will not pay anything before delivery, and every buyer who walks away is an order you already paid Meta or TikTok to get. This guide shows how to work out whether the advance makes you more money or less, how to set it up on Shopify with Raast, what to write to the buyer, and which orders to ask it from.

Why a small advance changes buyer behaviour

There is little public data on COD in Pakistan, but one study shows the gap clearly. A June 2026 OrderNation study of about 127,000 parcels from one large Pakistani online retailer, shipped between July 2025 and June 2026, found:

These numbers come from a single retailer and cover fully prepaid orders, not partial advances, so do not expect your returns to fall by the same amount. What they do show is that money paid before dispatch separates buyers who mean it from buyers who were only curious. An advance is a smaller version of the same filter.

Paying a small amount online is also no longer unusual. According to Profit's report on State Bank of Pakistan data, Raast handled 742.1 million transactions worth Rs 23.3 trillion in January to March 2026, of which 664 million were person-to-person transfers. Person-to-merchant Raast payments rose to 55.9 million from 36.3 million the quarter before. SBP's rules make Raast transfers free for end customers, so a buyer sending you Rs 250 from a bank app pays no fee.

The catch: buyers who will not pay first

COD exists in Pakistan because buyers do not trust unknown online stores. That fear has a basis: in 2021 the Express Tribune reported FIA sources describing buyers who paid in advance through mobile wallets and then received nothing or low-quality goods, with the seller becoming unreachable. When your store asks for money first, some honest buyers will think of exactly that and leave.

So the advance has two effects at once. It removes many fake, prank and impulse orders, which is good. It also removes some real buyers who would have accepted the parcel, which is bad. Whether you gain depends on how many of each you lose, and you can calculate that.

Example: does an advance of Rs 250 pay for itself?

Example (illustrative numbers, not real store or courier data). A seller gets 100 orders from ads. Each order is Rs 3,000, product cost is Rs 1,100, forward shipping is Rs 250, the courier charges Rs 200 per return, and ads cost Rs 400 per order placed, so Rs 40,000 in total. Returned stock comes back and can be resold. Under full COD, 20% of shipped parcels come back. With a Rs 250 advance, assume returns drop to 6%, and the Rs 250 is kept when a buyer refuses, as the store policy says.

Each delivered parcel earns Rs 1,650 before ads (Rs 3,000 minus Rs 1,100 product minus Rs 250 shipping). Each returned parcel costs Rs 450 under full COD (forward plus return charge), but only Rs 200 with the advance, because the Rs 250 already covers the forward shipping.

With 15% of buyers dropping out, the advance earns Rs 8,000 more, mostly because you stop paying for 15 parcels that would have come back. With 30% dropping out, it earns Rs 14,900 less, because the real buyers you lost were worth more than the returns you saved. In this example the break-even is about 20%: if more than one in five buyers refuse to pay the advance, full COD with a good confirmation call makes more money.

To run the calculation for your own store, work out: profit per shipped parcel under COD = (delivery rate x profit per delivered parcel) minus (return rate x cost per return). Do the same for the advance with its own rates. Multiply each by the number of parcels shipped in that option, subtract the same ad spend from both, and compare. The two numbers you cannot guess are the drop-out rate and the new return rate, so measure them with a short test before switching the whole store.

Which orders to ask an advance from

You do not have to choose one rule for every order. Most sellers do better asking an advance only where returns are high and keeping plain COD for the rest. Good triggers to use:

• Cities or areas where your own return rate is much higher than your average.
• Products with a high return rate, or a high price where one return wipes out the profit of several sales.
• First-time buyers from social media ads, rather than repeat buyers or buyers who found you on Google.
• Phone numbers that did not answer the confirmation call or WhatsApp, or that returned a parcel before.
• Large orders of one item, for example five of the same size, which often turn out to be pranks.

To set these rules you need your return rate split by city, product and courier, not one store-wide figure. RabbitROI shows RTO rates by courier, city and product, and net profit per ad campaign after returns, which is the number to compare before and after you start asking for an advance.

How to set it up on Shopify with Raast: step by step

1. Pick the amount. The delivery fee is the easiest to explain because it is a real cost to you. Keep it the same for everyone you ask, for example Rs 250.
2. Register your business bank account's mobile number as a Raast ID in your bank app, so buyers can send money from any bank or wallet that supports Raast. Use an account in your business or registered name, because the buyer will see the account title.
3. In Shopify admin, go to Settings, then Payments, then Manual payment methods, and create a custom payment method, for example "COD with Rs 250 delivery charges in advance". Write the Raast ID, account title and steps in Payment instructions; Shopify shows them on the order confirmation page. Orders paid this way show as unpaid until you mark them paid.
4. Write your policy on the product page and checkout in one line: what is paid now, what is paid at the door, and whether the advance is refunded if you cancel or the item is out of stock (it should be).
5. Send the WhatsApp message below within minutes of the order, while the buyer still remembers it.
6. When the money arrives, check the order number in the transfer note, reply with a thank-you and the dispatch date, and record the payment on the order. Dispatch only after that.
7. If the buyer has not paid within 24 hours, send one reminder. If there is still no payment, cancel politely. That cancelled order cost you no shipping.

WhatsApp message to copy

Assalam o Alaikum [name], thank you for your order [order number] for [product], total Rs [total]. To confirm, please send Rs 250 delivery charges via Raast to [Raast ID], account title [business name], and write [order number] in the note. The remaining Rs [total minus 250] is paid to the rider in cash. Your parcel will be dispatched the same day we receive it. If any item is out of stock, we will refund the Rs 250 in full. We will never ask you for an OTP or PIN.

Three things in that message build trust: the account title matches your store name, the remaining amount is written out so there is no surprise at the door, and you state the refund case. The last line matters because asking for codes is exactly what scammers do.

How to test it for two weeks before switching

1. Choose one trigger, for example first-time buyers from one high-return city, and ask the advance only from those orders.
2. For the same two weeks, keep a comparison group on normal COD with a confirmation call.
3. Track three numbers for each group: share of orders that paid or confirmed, share of shipped parcels returned, and profit after ads and returns.
4. Wait until the returns have actually come back before judging. The OrderNation study found failed COD deliveries took a median of 21.7 days to show in the books, so a test judged after one week will look better than it is.
5. Keep the advance only where the profit number is higher. If buyers drop out above your break-even, go back to COD and spend the effort on order confirmation instead.

FAQ